House prices now falling twice as fast

Julian Harris
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THE DECLINE in house prices doubled its speed in October as economic turbulence scared prospective buyers and hit demand, a leading survey claimed this morning.

Average house prices were down 0.2 per cent in England and Wales this month, compared to declines of 0.1 per cent in each of the previous five months, the report by Hometrack said.

In London prices stagnated, halting seven straight months of rising prices. London’s market has largely defied the UK housing slump this year, yet also appears prone to current economic hardship.

“While headline prices have held up across London over recent months there are parts of the capital where prices have drifted downwards – south east London saw prices down 0.3 per cent over October,” the report said.

“Price falls are being felt in areas with weaker domestic demand. This is in contrast to central London where the housing market is being primarily driven by international demand and equity.”

Nonetheless, across the last six months London has had the fewest areas registering price falls than any other region, the report said.

Throughout England and Wales, over a third (34 per cent) of post codes recorded dropping house prices in October, compared to just 25 per cent in September.

“Growing consumer concern over the outlook for the economy is beginning to impact directly on house prices,” said Hometrack’s Richard Donnell.

Over the last year, house prices have declined by an average of 2.8 per cent, Hometrack calculated.